Lender cuts post-Bank of England rate reduction

A new theme is emerging with the latest round of rate cuts from lenders, namely that the focus has shifted to the mid-range products in the 70%-85% LTV range. It seems the main focus for lenders, though, remains with those moving home, which is disappointing for those that need to remortgage in the coming weeks and months.

You could be forgiven for thinking all lenders would be slashing their rates across the board after yesterday's base rate cut, but no. Skipton Building Society appear to keeping a level head on their shoulders and stem the flow. They will do this by making some of their products look less attractive as of this coming Monday. Some of their lower loan to value products have been increased in interest rate whilst also having fees increased. Saffron Building Society on the other hand are a small lender going in big, with a large cut across its 80%-95% loan to value range. They are being bold by offering a 0.4% cut on their 95% first-time buyer mortgage, really helping those looking to start out in their first homes. They are also giving a stonking 0.5% drop on their 80% loan to value products. Saffron are really showing commitment to cash strapped households, desperate for a cheaper deal.

With the first base rate cut in four years the first hurdle of the borrowing steeplechase has been removed. Despite some lender reductions prior to the base rate change, it’s welcomed to see further rate reductions on the back of the Bank of England decision. The starters gun has gone off and the property market is about to sprint for gold.

We've seen swathes of lenders cutting their tracker and Standard Variable Rates which was expected. We're pleased to see sizeable drops in SWAP rates which in turn is leading to lenders reducing fixed rates too. All in all a very positive sign for the property market and we expect to see more reductions in the coming days and weeks of August.